topic Why do Credit card companies... in Credit Cards

Why do Credit card companies...

bigblue7722 — Fri, 10 Apr 2015 02:42:57 GMT

Why do credit card companies offer so much better rewards for shoping online thru their portal rather than someone going into a B & M store? Like right now discover is offering 10% cash back at home depot but if i go into the store i only get 1% back. What gives? If i was home depot or discover i would want someone to go into a store rather than buy something online. Chances are for me atleast if i go into a store i buy something i never really thought i would in which case i spend more money. Same reason why milk is always at the back of the supermarket they want you seeing everything they offer and maybe you will have an impluse buy. However, online i tend not to have that impluse buy and in which case i spend less money. So what i am missing? I know it must cost more to sell prodcuts in a B & M store but with so many places offering free shipping that must cut into profit margin.

Re: Why do Credit card companies...

leoment — Fri, 10 Apr 2015 02:35:57 GMT

I always wondered that too.. The only thing I can think of is, with the internet you have an almost infinite number of retailers to buy the same product from, and most website now offer some form of free shipping with a certain spend level reached. Thus by offering the cashback online, shoppers are incentivised to choose their site over others. Not to mention the costs to run their online store are likely WAY lower than their B&M stores.

Re: Why do Credit card companies...

gdale6 — Fri, 10 Apr 2015 02:47:22 GMT

@bigblue7722 wrote:
Why do credit card companies offer so much better rewards for shoping online thru their portal rather than someone going into a B & M store? Like right now discover is offering 10% cash back at home depot but if i go into the store i only get 1% back. What gives? If i was home depot or discover i would want someone to go into a store rather than buy something online. Chances are for me atleast if i go into a store i buy something i never really thought i would in which case i spend more money. Same reason why milk is always at the back of the supermarket they want you seeing everything they offer and maybe you will have an impluse buy. However, online i tend not to have that impluse buy and in which case i spend less money. So what i am missing? I know it must cost more to sell prodcuts in a B & M store but with so many places offering free shipping that must cut into profit margin.

Merchants typically foot the bill for the rewards in sliding scale fees depending on the card being presented. Discover makes money on the those deals or they would not offer them, the merchant gets a huge audience as well, anyone having the Discover card can get the deal its huge business. Thanks for the heads up Im going to head on over to deals got some stuff to order from HD for pickup at the local store.

Re: Why do Credit card companies...

bigblue7722 — Fri, 10 Apr 2015 02:51:47 GMT

@gdale6 wrote:
@bigblue7722 wrote:
Why do credit card companies offer so much better rewards for shoping online thru their portal rather than someone going into a B & M store? Like right now discover is offering 10% cash back at home depot but if i go into the store i only get 1% back. What gives? If i was home depot or discover i would want someone to go into a store rather than buy something online. Chances are for me atleast if i go into a store i buy something i never really thought i would in which case i spend more money. Same reason why milk is always at the back of the supermarket they want you seeing everything they offer and maybe you will have an impluse buy. However, online i tend not to have that impluse buy and in which case i spend less money. So what i am missing? I know it must cost more to sell prodcuts in a B & M store but with so many places offering free shipping that must cut into profit margin.
Merchants typically foot the bill for the rewards in sliding scale fees depending on the card being presented. Discover makes money on the those deals or they would not offer them, the merchant gets a huge audience as well, anyone having the Discover card can get the deal its huge business. Thanks for the heads up Im going to head on over to deals got some stuff to order from HD for pickup at the local store.

thanks for the info. I am closing on my house next week ive been buying stuff like crazy from home depot. They have had some really good sales for spring time. Just picked up a ladder and lawn cart for 60 bucks total.

Re: Why do Credit card companies...

DigitalArk — Fri, 10 Apr 2015 03:11:01 GMT

I think the prices have been marked up on their portals...